One of America's greatest love affairs is with cheap stuff. Yes, consumers generally want things to come fast, and sure, they'd like them to be of decent quality — but above all, what they really care about is the price tag.

Many retailers understand this obsession and are eager to cater to price-sensitive customers. But serving this desire does not guarantee success: The single-minded focus on price means that often we can be pretty disloyal about where our cheap stuff comes from. And in a race to the bottom, there's always someone willing to go lower. At the moment, that's the Chinese online retailers Temu and Shein, whose rock-bottom prices are proving almost impossible to beat for American companies.

Some formerly hot big-name retailers have had a tough go of it as of late. Liberated Brands — the operator of the beloved millennial brands Billabong, Quiksilver, and Volcom — filed for bankruptcy in February and said it would close all its US locations. The fast-fashion retailer Forever 21 is reportedly mulling filing for bankruptcy for the second time in five years. According to the research and advisory firm Coresight, major US retailers announced 7,325 store closures in 2024, up by 33% from 2023 and the highest number since 2020. The bloodbath has continued into 2025: More than 3,000 store closures have already been announced this year. Names such as Big Lots, Party City, Joann, Kohl's, Dollar Tree, and Macy's are shuttering locations. And it's not just physical retailers that are struggling — shares of the online retailer Etsy tumbled after it reported disappointing sales numbers during the holiday season.

When a retailer is having a hard time, it's usually for a multitude of reasons — poor management, a declining brand, changing consumer tastes, etc. But in many of these cases, one quite new factor is contributing to their troubles: supercheap Shein and Temu, which are increasingly hard to contend with. Many American consumers love to cycle through stuff rapidly and thoughtlessly, and the Chinese retailers let them do that in an unrivaled manner.

"What they've done that hurts the competition the most is compete so strongly on price that, yes, it makes it very difficult for anyone else to compete in that way without losing that money," said Sky Canaves, a principal analyst of retail and e-commerce at EMARKETER. "It puts other retailers on the back foot."

In the realm of cheap stuff, there's no such thing as cheap enough.

Liberated Brands has blamed several factors for its bankruptcy, including inflation and a volatile economy, but inexpensive online retailers are also contributing to its woes. In a sworn declaration accompanying the company's bankruptcy filing, its CEO, Todd Hymel, said the company had faced challenges from "shifting consumer preferences" toward fast fashion and e-commerce that harmed its pricing power and profitability.

"Consumers can cheaply, quickly, and easily order low-quality clothing garments from fast fashion powerhouses and have such goods delivered within days," he said. "These fast-fashion companies can cater to micro-trends as opposed to the traditional seasonal trend-forecasting retail model."

Forever 21 finds itself in a similar position, struggling to contend with Chinese e-commerce companies that can undercut it on price and are relatively indistinguishable, quality-wise. (You probably can't tell if a dress was from Shein or Forever 21 without looking at the tag.) In 2023, Forever 21 announced a partnership with Shein in an "if you can't beat 'em, join 'em" move. But apparently, even that hasn't been enough. For its part, Etsy made its name as a marketplace for personalized, handcrafted items from tiny creators. In recent years, though, it has expanded into offering inexpensive mass-produced goods in an effort to keep up. The problem is that whatever T-shirt you can get printed off Etsy for cheap you can probably find on Temu (or Amazon) for even cheaper.

Liberated pointed to a press release about its bankruptcy filing and otherwise declined to comment for this story. Forever 21, Shein, and Temu did not respond to requests for comment. Etsy declined to comment.

Most retailers don't outright say that Shein and Temu are a problem for them. It's not a great look to admit that you're hemorrhaging customers because you can't compete with e-commerce companies selling the lowest-quality, lowest-priced versions of everything you make. But if you read between the lines, the issue is present.

"Retailers sometimes are talking about consumer behaviors or cautious spending, and we think some of the siphoning off of sales to Shein and Temu is getting bundled up in the overall narrative of consumer caution," said John Mercer, the head of global research at Coresight. "Yeah, there's been some caution, totally, but some of what companies are reporting under that could be losing sales to Shein and Temu."

Coresight has estimated that Shein and Temu may be a $100 billion threat to traditional retailers.

Shein and Temu mostly employ well-trodden tactics from other retailers and push them to the limit in ways other companies can't. Instead of American companies manufacturing their stuff in China and shipping it over to the US, they decided to cut in on the action by making and shipping stuff themselves. The more direct supply chain allowed Shein and Temu to get agile and efficient enough to feed the American consumerist beast.

"You have to appreciate the fact that China for decades was always known as the country that merely manufactured products for other retailers," said Brittain Ladd, a retail and supply-chain consultant. "Shein and Temu, what they did is they researched retail in the US and Europe and so forth, and what they determined is we can do better. We actually can take what makes us special, our capabilities and manufacturing and supply chains and low-cost sourcing, all of that, and we can create business models where we can beat the best retailers in the United States."

Shein, which has been around since 2008, can quickly identify fashion trends and get them marketed, produced, and shipped to consumers' doors. The garments may take longer to arrive than if they came from Amazon, but the price makes them appealing. Temu, a newer entrant that sells items well beyond clothes, has the benefit of a monster parent company, the Chinese giant PDD Holdings, that allows it to set super-low prices that essentially no other retailer can stomach. It's not all that different from what Amazon did when it started out, losing money on e-commerce to get customers.

"They're backed by a very deep-pocketed parent company that is willing to lose money for a sustained period of time to gain market share in the US and elsewhere in the world," Canaves said. "It's a very aggressive strategy."

Now, I know what you might be thinking here: What about Trump and the tariffs and all this talk of taking on China? Shein and Temu have a plan for that — or at least they may not have to worry too too much.

Historically, Shein and Temu have been able to take advantage of a tax loophole that allows importers to avoid paying duties and taxes on shipments worth less than $800, known as the "de minimis" exemption. (Because what they sell is so inexpensive, it's tough to get to $800 in a single order, so they can put a bunch of orders together, too.) For some context, nearly 1.4 billion shipments entered the US through the de minimis exemption last year. Early in his term, President Donald Trump signed an executive order trying to close that loophole. Shein and Temu were prepared and had already been fulfilling more orders from the US and building up inventory stateside. Still, the executive order caused so much chaos at ports that it was put on pause. If the pause is lifted, the scenario won't be ideal for Shein and Temu, but it won't be a killer either.

"They're just simply storing the inventory in the US, just like other retailers do," Ladd said. "And even though that's a higher-cost methodology, it still allows them to sell their products at a price point much cheaper than anyone else."

It's a similar story with the 10% tariff Trump has imposed on goods from China. It's not great for Temu and Shein, but it's also well below the 60% Trump was floating on the campaign trail. It's relatively easy to pass some of that increase on to customers, and since plenty of their competitors import from China, too, they can keep their relative price advantage.

"Shein and Temu are rock bottom of the market," Mercer said. "If the whole market is rising in price, you can put your price up and still be rock bottom."

Some retailers have been able to ward off the Shein and Temu threat. Walmart and Amazon may not be able to go as low on prices, but they also offer things the Chinese e-commerce companies don't: faster delivery, groceries, different products. In November, Amazon launched Haul, a section of its app that, ironically, looks and works like a knockoff Temu. Other retailers at risk of going the way of Billabong or Forever 21 have managed to reinvent themselves and retain relevance, such as Gap and Abercrombie.

"You're not going to be able to outcompete Shein or Temu on price, so you have to build that almost emotional relationship with" customers, Mercer said. "You have to stand for more than low prices."

Ladd added, "Retailers go out of business because they lose relevance with customers."

Not to let flailing retailers off the hook here, but they're not dealing with the easiest of circumstances. Inflation has been a problem. The economy is unstable. It's not clear what tariffs and trade conflicts will mean for the retail industry. They're also managing a price-obsessed American consumer who's easily lured away.

We're attracted to cheap stuff not because of its quality but because it has a low enough price that allows us to constantly churn through the stuff, said Wendy Woloson, a history professor at Rutgers University who wrote "Crap: A History of Cheap Stuff in America."

"We don't have to make commitments to the things around us because if they're cheap enough and if they're available enough, then I can always buy something else," Woloson said.

When the barrier to entry is so low, there's no significant consequence of consuming like this. Hate that mousepad you got on Temu? Who cares; it was $2.74. Woloson noted that some people can't afford to buy something nicer, but even if everyone could, it's not clear they would. We live in an era of flash fads. People don't want a $200 pair of jeans that'll last for a decade — they want a $20 pair they can toss when the next trend cycles through.

"I think we're really bored," Woloson said.

At the moment, Shein and Temu are winning a race to satiate the insatiable American consumer, and they're undercutting retailers big and small in the process.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.